Chapter 70

Using Solver for capital budgeting

Question answered in this chapter:

  • How can a company use Solver to determine which projects it should undertake?

  • How do I solve for additional constraints?

  • How do I solve binary and integer programming problems?

Each year, a company such as Eli Lilly needs to determine which drugs to develop; a company like Microsoft, which software programs to develop; a company like Procter & Gamble, which new consumer products to develop. The Solver in Microsoft Excel can help a company make these decisions.

Answer to this chapter’s question

How can a company use Solver to determine which projects it should undertake?

Most corporations want to undertake projects that contribute the greatest net present value ...

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